General Lithium, an off-take partner of the project, has conducted testings at its laboratory and affirmed that concentrate from Pilgangoora can be readily converted to battery grade lithium.

Demand for lithium is expected to grow, driven by the predicted uptake of electric vehicles that use lithium ion batteries, and by the growth in energy storage solutions requiring lithium concentrate supplies.

The Pilgangoora open pit lithium mine will be developed in the Pilbara region, about 120km south of Port Hedland.

It will produce lithia raw materials (spodumene concentrate) that can be used to support a full range of lithium products for lithium ion batteries and energy storage solutions.

Construction of the mine is expected to generate around 300 jobs and mine commissioning is expected to commence towards the beginning of 2018.

Concentrate will be exported from Port Hedland, predominantly to China under existing off-take agreements for processing lithium carbonate and lithium hydroxide for a wide range of lithium products.

Pilgangoora has secured two long term off-take agreements, with Ganfeng Lithium and General Lithium, for the majority of the mine's expected output of 2Mtpa per annum of processed ore. Ganfeng Lithium is one of China's largest fully integrated lithium companies and General Lithium is a major producer of battery grade lithium carbonate in the Chinese market. Both have plans to expand their conversion capacity for lithium products in the near term.

In its first investment in a WA mining project of this type, the CEFC is supporting the project through a US$15 million cornerstone commitment (around AUD 20 million) to a US$100 million senior secured bond issuance by Pilgangoora Operations Pty Ltd.